3-wire -> Spa GFI -> Control box

[Howhownow]

OK, so I finally finished my controller. I was a bit apprehensive when I turned it on, but it appears to function perfectly. I'll be doing a water test in the next couple of days.
The one unexpected thing is the the light function. I moved them before the SSR/SSVR to have them be constant on/off, not subject to the PID/pot. The lights that correspond with their equipment work well. The issue is that I am getting leakage back through the other equipment (SSR on the pot side and vice versa) that is causing the light to fire dimly. At first this caused me a lot of consternation, but I thought about it a bit and did some testing, and it's actually a cool feature. When I am in PID mode, the PID light is lit, and the other flashes according to when the element fires. In pot mode, that light works, and the other dims/ brightens according to the voltage through the SSVR.
I have 2 follow up questions:
- Is this dangerous or doing any damage to my SSR/SSVR/ lights?
- If I decide I want to, Will the below 'Draft' diagram fix my issue? The selector switch does have connections to support this wiring.

Current "leaky" wire config:

Proposed fix:

 

[56Beers]

So I've never worked with high voltage before. I do a lot of projects around the house, build an entire HERMS system over the past year and a half and bought a control panel from Kal. I sent him this picture as a sanity check. He said I have to have 4 wires in and 4 out. Of course the point is my dryer plug is 3 wire. Also not up to code bonding to the panel. I get that. My question is is this correct? Will it work? Is it safe. Obviously it will be disconnected when not in use. Just afraid to connect power until I know it is right! Appreciate any help